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Thursday, August 29, 2013

Cloud is a difficult nut to crack: Big organizations don’t know how to deal with it

As discussed in my previous
article that replicating the success in cloud has been very difficult for some of
the big organizations which are tuned to sell traditional license based
products. The reasons are many. It is however interesting to go through them as
you can see a clear pattern emerging.

Behave like an ostrich, the mode of self-denial: About 3-4 years back cloud was still in –
infancy. However, the reactions from the top software product players were stereo-typical
– burry your head in the sand and feel safe. Most of the big guys thought that
cloud is a flash in the pan and will not stand the testimony of time. At least
they tried putting a brave face in front of the world. They were in this mode
till it became too late for them. Some of them started reacting to the
challenges but it was a case of too little and too late.

Partner Ecosystem: Some of the large enterprise organizations owe
much of their success to the partner ecosystem. Now moving on to the cloud
doesn’t help much the partners as they earn their money around the consulting
work. By the very nature of cloud solution the consulting pie decreases.

Internal culture: The internal culture is one of the main roadblocks
toward a successful transformation towards a cloud business model. The sales
machine ( read as the sales organization) is so hung up on a commission model
which is based on license sales they find it very difficult to move on to a
commission model which is more geared to a SaaS cloud based model where in the
revenue is staggered over a number of years.

White washing of cloud offerings:
Whitewashing the cloud offerings by all parties have left the
markets and customers confused. Even services like remote infrastructure
hosting seem to have been branded as cloud by organizations.

The difficult times of 2008: As big fat software product
organizations were hoping that cloud would die down over a period of time, the
economic crisis provided the much needed support for the cloud based organizations.
Cash strapped organizations were looking at cloud more from changing their CAPEX
to OPEX. They also become more open to cloud based solutions.

Technology advanced: As there was more adoption of cloud in the
market the fear of security breach of cloud solutions died down or maybe
customers took a more realistic view of the problem ( if at all there was any
serious problem, which I feel was never there ).